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tv   Newsnight  BBC News  June 1, 2017 11:15pm-12:00am BST

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we'll ask these two party protagonists what they can do to revitalise britain's industrial heart and make us all rich. he's doing better than many predicted. so what will labour's anti—corbyn wing do now? mr corbyn is ready to forgive and forget. you know what, i do a lot of group hugs with lots of people. i love a group hug, myself. laughter. opponents of corbyn have been flummoxed by his success. and they're reviewing their tactics. and our latest political bedtime story, from someone who's made a bit of money writing them. there is an apocryphal story about a former united states president. sadly, because of public cynicism about spin, a lot of people believe it. hello.
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this is turning out to be a weird election — opinion polls gyrating, reputations fluctuating, the unpredictable quickly becomes conceivable, or not. there's been farce, and sadly, there has been more tragedy in this campaign than we've experienced before. yet, a week to go to the vote, and it feels as though some of our structural problems have yet to get a mention. so we're going to start with one tonight, even at the risk of looking like we are off the subject of the campaign. the question is — how we deal with britain's lopsided, low—productivity economy? for all the rhetoric of us being the fifth, or is it now sixth largest economy in the world, it's not firing on all cylinders. do the labour and conservatives parties really have any idea as to how to improve things? we'll ask them that, and some other questions. but first, a quick look at the journey we've taken, and the problem we've arrived at. through the monstrous
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scenery of slag heaps, chimneys, piled scrap iron, foul canals, paths... no town has come to that represent the poverty of the past than wigan. george orwell's 1937 tract, the road to wigan pier, gave a shocking description of the grim reality of life at the time. pinched faces, ruined by malnutrition. eight to ten people living in three—room houses with no bath and infested with bugs. many working class adults have none of their own teeth. orwell brought home that britain was two nations. seven decades on, and everything has changed. very few children are barefoot and malnourished. obesity is a national problem. most teenagers have mobile phones. and wigan itself sometimes tires of its association with the misery of the past. so, yes, we've moved on. but that doesn't mean we can relax, go home and play on a chinese—made tablet.
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we have a new challenge to face. it's a first world problem we have now. it's about how we create more productivejobs. this box—making factory in wigan provides semiskilled work. the town needs more of this. but it needs even more of the top end stuff. without that, we can't get pay levels up, or tax revenues to pay for public services. i think the objective has got to be to look at creating those higher—productive jobs, those higher—skilled jobs. they don't exist at the present moment in time. it's a little bit chicken and egg. what do you do, create the jobs and hope that workers will come? or do you have the workforce with those high skills, but no jobs for it? so, it's a real mix of getting that balance absolutely right. i don't think we have yet. notjust in wigan, but in huge parts of the country. the key word, productivity — how much we get out for an hour of work we put in.
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britain's performance is pretty lamentable. france, germany and the us are way ahead, each producing about 30% more per hour than us. lucky we work long hours, or we'd be way behind them. part of the problem here may be equipment, as well as the skills to use it. in our case, in our small pocket of wigan, i try as much as possible, as the owner of belmont packaging, to ensure the staff have as good a shot as possible to learn more and to skill up, in order to combat the automisation that undoubtedly will happen in years to come. the productivity challenge is huge, but the key point is that challenge is not uniform across the country. so, a big part of this problem is post—industrialisation. it doesn't so much affect the huge
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cities, it's the secondary cities and the large towns that have struggled to get the investment and struggled to upgrade their skills. it's these places, by the way, that have tended to express discontent with the system. 64% of wigan voted for brexit. so, the challenge is to bring more productive jobs and more economic life to the parts of the country that haven't had it so easy. just behold the scale of disparities by looking at the value of each worker's output per hour. london is 31% ahead of the national average. apart from the south east, all the nations and regions are below average. the north west is 10% below. wales and northern ireland are each about 20% behind. so, britain's poor productivity and its extreme imbalances can be seen as one and the same problem. i think they are related. london's got very high
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levels of productivity. if you want to raise national productivity, you're going to have to do it in places like the north east and the north west, and south wales. the old de—industrialised regions have to have their productivity catch up. and i don't think there's a lot of mystery, in some ways, about what's needed. it's investment, it's investment in infrastructure, it's research and development. undoubtedly, of course, everybody will say they support the end. the question is whether they have the imagination or the will to find the means. well, it is all about building post—brexit britain. both main parties have conceded that there needs to be some change in the national economic model to spread the economic benefits more widely. let's test their views. i'm joined by david gauke, chief secretary to the treasury. and peter dowd is labour's shadow chief secretary to the treasury. good evening to you both.
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daivd gauke first. make your pitch to the people of wigan as mac what can you do to revitalise or upgrade the economy there? first of all, i think your report hit on port in thing. if we want to improve living standards we have got to create the wealth , that is absolutely key. how do we do that to benefit, say, wigan? part of it is about infrastructure. we've got to be fiscally credible but you've got to put the infrastructure in, improve the transport links. bring those northern towns and cities together is what has driven the northern powerhouse thinking, that's really important. making sure that we are forward—looking and innovative, there is a role for government there in helping research and development, there is a lot of research we are doing with innovate uk. we said in our manifesto we want to be the most innovative country in the world. in terms of providing support for research and development, for example, seeing that as a priority, that is rarely important. skills and training as well.
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more money for skills and training? i can't find any in your manifesto. there was more money set out in march. it wasn't just about money, it was about making sure we have the new t levels, properly recognised qualifications. let's hold your thoughts, thank you. peter dowd, i want to hear what your pitch to the people of wigan would beat and whether it's actually any different to what daivd gauke says, and whether we can distinguish between the position of the parties on this. i don't think austerity—lite is worked. we have lower levels of productivity as has been set out in the piece —— investment is pretty dreadful. skill levels are port. what do we do about it? ok, the issue on that one is that you need investment. to get level of productivity up, you need investment in capital and labour. and whether that is in education,
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whether it's in physical infrastructure, that's what we actually need. and what we've got is a woeful lack of investment in that. the key to this is investment. right, how much are you invest in education? i'm looking at your spending commitments. you have a lot more for schools, is that going to make a difference? you have a bit more. is that the difference between you and the conservative party in what you will do for wigan? we are talking about £25 billion investment in education, in a sense from the cradle right the way through life. it is investment in early years, its investment in secondary education, further education and skills, which has taken a total battering. it is investment in university and generally in lifelong learning, skilled pupils to bike does that include the £11 billion loss
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spending on skilled grants? half the total budget is on students. are you expecting more people to go to university as a result of your free tuition? i think it will be a mix. some people will go to university, but that's the point... are you expecting more? if you are spending £11 billion and we get the same output. i would expect them to go more. it is a refresh, a different look at the education service. it isn't just focus on university students, it has to be a holistic approach over a long period of time to education. what we have had is an atomisation of our education service. while rome burns in terms of education, we have stuff about grammar schools and the issue about academies, free schools, the point i'm trying to make is that until you get a coherent education service from cradle and told grave, virtually, we're just going to continue this path of lack of skills.
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